The Finance Ministry has revealed that the Ceylon Electricity Board (CEB) in Sri Lanka has incurred a loss of 18.2 billion rupees in the first eight months of 2023. This loss can be attributed to the controlled prices implemented by the board.
During the same period, CEB's revenues reached 402 billion rupees, a significant increase from the 172 billion rupees generated after an initial 66 percent tariff hike that was provided to the agency ahead of an International Monetary Fund (IMF) program.
In mid-2023, the regulator made a cut of 14.4 percent to the controlled price, which was higher than the 3 percent reduction requested by the CEB. This triggered an interim tariff hike in order to secure a news staff level agreement from the IMF for the upcoming year.
The Finance Ministry stated that the CEB incurred a loss of 20.8 billion rupees up to August, as the delayed and limited tariff was insufficient to compensate for the significant increase in generation costs. These costs had risen by 55 percent to 324 billion rupees in the first eight months of 2023, compared to 209.4 billion rupees in the previous year, primarily due to high fuel and coal prices.
In terms of currency exchange rates, the Sri Lankan rupee experienced a collapse from 200 to 360 against the US dollar in 2022 due to inflationary open market operations. However, it appreciated to 330 amid deflationary open market operations starting from around September 2022, along with the lifting of a surrender rule in March 2023.
